Amazon Boycott Over Internet Sales Tax Gains Momentum

Amazon is facing a boycott from a coalition of nonprofits in California over its opposition to an internet sales tax. The group is calling for users to cancel their accounts unless the world's largest internet retailer stops its attempts to force a repeal.

According to the Bay Citizen newspaper, the Seattle-based internet retailer has contributed $3m towards a group called More Jobs Not Taxes, aimed at repealing the state's newly introduced tax.

One of the groups behind the boycott, Think Before You Click CA, claims that the sales tax will bring in $200m in additional revenue, and encourage people to shop in local bricks-and-mortar stores instead of online.

However, the national anti-Amazon lobby on this issue isn't only made up of small businesses and non profits. According to a comment piece on the website Geekwire, the bulk of the money for the national pro-sales tax group Alliance for Main Street Fairness comes from Wal-Mart and other big-box retailers.

Over the past few years, a number of states have proposed or passed internet sales tax legislation, often termed by the media as 'Amazon laws.' The result has been that Amazon has either closed operations, severed affiliate relationships, or not built promised distribution centers, in those states, putting hundreds of people out of work. This has happened in Texas, Colorado, North Carolina and Rhode Island, among others, with The Memphis Business Journal reporting that Tennessee may introduce its own internet sales tax by the end of the year. (For more detailed, state-by-state information on Amazon's operations in relation to sales tax, see this graphic from The Wall Street Journal.)

Amazon has so far declined to comment on the boycott. It's not the first time they've faced such a measure, with other boycotts being called for over its hosting of Wikileaks and then its subsequent removal of the site, as well as the questionable content of certain books on sale via its website. However, arguments for and against an internet sales tax in California, the home of Silicon Valley, are getting particularly heated, and this boycott could yet prove significant.

In the past, Amazon has called instead for the introduction of a streamlined federal sales tax, with its CEO Jeff Bezos claiming in comments at Consumer Reports' headquarters this June that "we’ve been insisting on this for 10 years."

According to their report filed with the State of Washington, Amazon spent $630,000 on lobbying federal government in the first three months of this year. That included an undisclosed amount spent on "issues related to the taxation of remote sales."

As yet, it is unclear if the internet retailer is lobbying for the introduction of streamlined sales tax with the same vigor and financial investment as they are currently applying to repeal the online sales tax in California.

Comments

[Aaron Calhoun]

06:19 PM on 08/27/2011

"Over the past few years, a number of states have proposed or passed internet sales tax legislation, often termed by the media as 'Amazon laws.' The result has been that Amazon has either closed operations, severed affiliate relationships, or not built promised distribution centers, in those states, putting hundreds of people out of work."

Is it just me, or does Amazon's apparent retaliation come off as extraordinarily d!ckish?

[Farmer Fred]

11:56 AM on 09/05/2011

No it just comes off as good business. If the states insist on making Amazon collect their sales tax BUT the court has ruled they can't unless there is a physical presence in the state, it only makes sense to remove all physical presence from that state. Any reaction (such as unemployment, etc.) is the STATE'S fault, not Amazon's.

[WhoIsNoOne]

09:35 PM on 08/21/2011

I always boycott Amazon....that is, until they have a free shipping
event. Then I suspend my boycott to purchase some stuff free
of shipping charges.
Lets be real folks. This tax is already there, you just haven't been paying
it.
In LA county a couple of years ago, we all voted to raise the sales tax to help
pay for some awesome stuff:
copy and paste:
-35% for transit capital projects .
-3% for transit capital on the Metrolink commuter rail system.
-2% for transit capital on things like rail cars and rail yards.
-20% for highway capital projects.
-5% for operations on new rail lines.
-20% for bus operation improvements.
-15% for local return
voted in with 67%.
I hate to be on the side of walmart (believe me, it hurts) but Amazon should
have to collect at the time of sale.

[wonderweirdo]

10:44 AM on 08/20/2011

The problem with the Tax in California is the taxing of out of state Commerce. If a company has no physical presence in a state, then they can't tax the transactions. Amazon doesn't have a physical presence in California, so they aren't obligated to collect or pay taxes on purchases. The state of Illinois, where I live, did the same thing and Amazon cut ties with the local merchant partners. A lot of those partners decided to move to other states like Indiana and Wisconsin which received them with open arms. These crazy taxes wont stand a challenge in court and are only serving to drive revenue from states.

I can think of a lot of problems with Amazon that would deter a person from doing business with them, this isn't one of them. If nothing else Amazon is a great resource to go through because you can get a great deal on something and pay less than you would otherwise because there are no steep state taxes.

[abandofoutsiders]

05:20 PM on 08/21/2011

Paradoxically several local businesses, sell their things thru amazon. I read in the news a while ago that Walmart was trying to sue them over this issue.

[QueenOfViolets]

06:28 PM on 08/21/2011

Amazon can't survive with only conservative customers who hate taxes.

They're going to lose a lot more money by stirring up this bitter partisan tax battle than they would have lost just by paying the darned tax.

I used to love my Kindle but now it just seems like opening it up and using it would be like joining the Tea Party and I'm not about to do anything like that.

[Aaron Calhoun]

06:23 PM on 08/27/2011

Haha, too funny! :) F&F!

[vega421]

01:24 AM on 09/22/2011

I don't know how one arrives at the specious connection between Amazon and the Tea Party, but for my part, I'm a registered CA Democrat and an avid Amazon customer. I see no particular conflict and have no plans to change either my voting or shopping habits.

On a more philosophical level (IANAL), this is exactly the situation that the Commerce Clause of the US Constitution was intended to avoid (Article I, Section 8, Clause 3). IMHO, this clause is often abused by Congress to justify all kinds of crazy things, but preventing state A from taxing a business located wholly in state B is precisely what the authors of the Constitution had in mind when giving Congress the power to regulate interstate commerce. Allowing one state to assert extraterritorial jurisdiction inside another state would lead to chaos.

[dianebarentine]

08:50 PM on 08/19/2011

California is in such bad shape for money primarily because Californians have voted down as many taxes as they possibly can. No revenue means no services. Slamming Amazon is a feel-good thing because it's not a direct tax. We don't want to pay for anything and we don't want to give up anything. That makes us immature, doesn't it?

[Aaron Calhoun]

06:28 PM on 08/27/2011

If one feels one is included in the "we" you referenced, then I suppose it "makes us immature"....however, since I have not "voted down as many taxes as [I] possibly can], I am not inclined to feel a part of the "we", and therefore am also disinclined to feel a part of the immature "us", either. ;)

[Carolyn Kostopoulos]

08:50 AM on 08/19/2011

i stopped using amazon over their treatment of wikileaks. amazon is like any too big to fail corporation. it sells books incidentally. it's real goals are to make money selling anything, to squash all competition and to achieve a global monopoly. as such, it has too much influence shaping the publishing world to suit it's needs.
all large corporations have to be stopped before they destroy the fabric of local communities. boycott as many of them as you can- amazon, macdonalds, duane reade, cvs, wal-mart.
sure, you might pay a bit more and you might have a few less options. but you will support local businesses, keep the money in your community, enjoy personal service when you shop and help slow the cancer of corporatism that is eating away at our lives.
you'll minimize your exposure on the internet and you'll probably end up making fewer impulse purchases. all good

[ARTIST50]

08:57 PM on 08/20/2011

I would agree with you but I moved back to my hometown of 18K to help care for my mother and there were no local merchants left - Walmart had already wiped them all out. It was the only place to shop and I refused, that's when I turned to Amazon - the lesser of two evils.

[Olderandwiser55]

04:45 PM on 08/21/2011

Good point.

[Bob Plugh]

01:36 PM on 08/27/2011

Hi,

Yes, but many small, local merchants are also opening online stores. Why not just find the closest merchant to you, even if it is 50-100 miles away and shop that way. Or, better yet - open up a local shop yourself - that's what I did!

[Olderandwiser55]

04:44 PM on 08/21/2011

It's funny-Amazon I remember it as the startup Bezos started on a shoestring. I believe the company did more for books and reading than anyone at the time. Literally hundreds of small book stores and other small stores sell on Amazon. There are stores "in your community" selling through amazon.

And they survived when all the crazy dot coms went bust. Now, it's a big, bad corporation. Yes, I love using Amazon for sending gifts and love browsing for my kindle. It's like going to the bookstore in my jammies.

[abandofoutsiders]

05:16 PM on 08/21/2011

You are right Older, I believe amazon is facing a lawsuit from Walmart over this issue.
To me Amazon, Ebay, Etsy are the only way local bussiness can compite with Walmart, Target, etc.

[chrisfromky]

07:54 AM on 08/19/2011

Since there is an Amazon processing warehouse like 20 miles from me I pay taxes when I order from them anyway. But overall I love that I don't have to pay taxes to most online retailers.

[PraiseGodAlways]

12:04 AM on 08/19/2011

Exactly, Amazon has what you can't find locally and i like it because it does have no sales taxes - i hate when companies that don't even exist in my state charge me sales tax for ordering from them online.

[MKB-1]

06:42 PM on 08/18/2011

Since joining the boycott, I've found there are many terrific options for buying the books and music I used to get through Amazon: you can get tunes (either CDs or downloads) directly from most bands' websites, and you can order books from many independent bookstores or directly from publisher homepages. I think my boycott just became permanent....

[abandofoutsiders]

05:29 PM on 08/21/2011

You can also buy from the vast array of "local" and "independent bookstores" that sell thru amazon, instead of directly from them.
"Not surprisingly, the companies that back states’ efforts to force Amazon to collect sales tax are the ones that already must collect sales tax nearly everywhere because they have stores nearly everywhere. Wal-Mart, Target and other big-box retailers claim that online retailers’ freedom from sales tax collection duties gives them an unfair advantage by allowing them to offer consumers what amounts to a discount.It may be true that not collecting sales tax is one of the advantages of doing business online, but that doesn’t mean it is an unfair advantage. Physical stores also have advantages, like being able to offer products immediately with no shipping costs. But those are not unfair advantages; they are just the results of choosing to run a certain kind of business. There is no reason why governments should “level the playing field” by making online-only retailers pay the costs of a system whose benefits they have consciously foregone."

[MKB-1]

12:50 AM on 08/22/2011

I'm not sure how Amazon can have "consciously foregone" the benefits of sales tax, since those taxes sustain the basic infrastructure required for business and society. I buy directly from the local independent bookstores, whether in person or on-line: there's no need to go through Amazon.com. I buy books and music constantly, and have found the boycott remarkably easy to stick to. As I noted in my previous post, I'm pretty sure it's going to be a permanent farewell to Amazon for me.

[Drew Porter]

06:11 PM on 08/18/2011

I think what people don't realize is that this is not a new tax - just a different way of collecting it. For many many years, California has had two taxes - a sales tax, which is collected for you by the vendor and a use tax, which you must pay on your tax return for anything that you bought and did not pay sales tax on. The only change with these so-called Amazon laws is that Amazon is being made responsble for collecting and paying the tax. RIght now, each and every taxpayer that does not report their on-line purchases on which they did not pay sales tax on their income tax return is setting themselves up for an eventual audit with the associated penalties and interest. The only thing that I think is stopping the State right now is that the agency responsible, the Board of Equalization, does not have the resources to go after the millions of taxpayers who are not in compliance with the law. Ultimately, I believe they will harness technology to do this. Having Amazon collect and pay the tax is much more efficient for everyone - the taxpayers and the State, than having this turn into a massive use tax audit of the millions of California taxpayers who are simply ignoring this line (Line 95, 2010 CA Form 540 or Line 25, 2010 CA Form 540 2EZ) on their California income tax returns.

[grilledturbot]

11:23 PM on 08/18/2011

The Board of Equalization? Heaven forbid that a California resident buy anything on line and not pay a tax! With every action, every breath, they must be more mindful of their duty to pay taxes. Sweet Taxes. Pay or be audited and find yourself subject to criminal penalties, possibly incarceration.

It'll take more than just the Board of Equalization. We need the Ministry of Truth.

[Drew Porter]

12:46 PM on 08/19/2011

Exactly right! That is why this legislation makes sense. Rather than create yet another bureaucracy, it just makes common sense to collect this tax though the sales tax, rather than having to have Californians have to keep track of each little purchase they make on line in an increasingly Internet based economy.

[Farmer Fred]

12:09 PM on 09/05/2011

Hmm. The BOARD OF EQUALIZATION -- does sound rather Darth Vaderish, doesn't it? "the Board of Equalizati­on, does not have the resources to go after the millions of taxpayers who are not in compliance with the law. Ultimately­, I believe they will harness technology to do this" I will love to see what happens in that far of day when ever resident of California receives a letter from the state IRS saying 'you owe $250,000 in back taxes and penalties.'

[jdns55]

04:43 PM on 08/18/2011

WAKE UP PEOPLE....This is about a TAX on things YOU buy online from ANYONE. They are just picking on Amazon right now. It is not about Amazon not paying taxes it is about the sales tax revenue they are not collecting from YOU the consumer to pay to the government. The government wants more money....what else is new?

[abandofoutsiders]

05:32 PM on 08/21/2011

They will certainly do it to ebay, etsy, etc.
"Not surprisingly, the companies that back states’ efforts to force Amazon to collect sales tax are the ones that already must collect sales tax nearly everywhere because they have stores nearly everywhere. Wal-Mart, Target and other big-box retailers claim that online retailers’ freedom from sales tax collection duties gives them an unfair advantage by allowing them to offer consumers what amounts to a discount."

[Aaron Calhoun]

06:56 PM on 08/27/2011

What's funny about that quote is that Walmart and other stores are basically implying that consumers are either unaware of the use tax, or unlikely / unwilling to report their purchases, neither of which is any kind of benefit to their argument, since such actions by consumers are unlawful, and as at least one poster Drew Porter already pointed, ill-advised since consumers are essentially gambling that the avoidance of sales tax in the short term outweighs the risk of repayment, penalties, and other sanctions related to a consumer's failure to pay a tax they are supposed to be paying already.

This whole controversy seems rather silly to me....if the Internet didn't exist, people would be paying sales taxes at the point of sale anyway, just like they did before the Internet. Since the explosion of online commerce, consumers have apparently seen it as a justifiable way of avoiding taxes they otherwise would/should be paying, based on current tax law.

I'm not saying the tax laws are right or proper, I'm simply saying that they are what they are, and if a consumer wishes to not pay sales or use tax on online purchases, they should pursue changing the tax laws that require it, not simply clamoring to retain a non-existent exemption to "use tax" laws.

[levarfan]

04:25 PM on 08/18/2011

Why would I support a movement to raise my own taxes? As a teacher, I'm already in a lower income group and sales taxes are by their very nature regressive. I buy a lot of things through Amazon because I prefer to avoid crowded stores and highways, and they carry what I need. I simply do not understand why these groups would want us all to raise taxes on ourselves for no reason. If states need more revenue, go after the corporations and wealthy who pay no to little tax.

[Bob Plugh]

01:47 PM on 08/27/2011

Technically, you are EVADING taxes by NOT PAYING THE USE TAX on those items you buy online from out of state vendors. It wouldn't RAISE your taxes, just PREVENT YOU FROM EVADING THEM.

That said - why not move somewhere sane that has no sales tax!!!

[Aaron Calhoun]

06:57 PM on 08/27/2011

Heh, heh....put about as plainly as one can.

[Rich Bushby]

03:18 AM on 09/04/2011

I have a better Idea lets do the fair tax and repeal the 16th amendment. Most folks don't realize they pay all corporate taxes through the price of the good they buy. Most middle class would pay less in taxes. This would eliminate the SS payroll tax and remove the CAP on SS taxes. The rich would pay more in taxes as there would be no loop holes any longer and everyone would pay taxes. The rich already pay the majority of taxes paid in our country. Yes under the fair tax they would pay more. Yes we can raise the taxes on the rich the problem is they have mobility every else does not. They can always vote with there feet. which is a lot more difficult for everyone else. Look at Mr Clinton's tax on Yhats in the early 1990's. IT worked so well the builders lost there jobs and the revenue for the government went down. Part of why companies are not hiring right now is the instability of the tax laws in our country.

[cbsappin]

11:29 AM on 08/18/2011

Special interests at their best.

If we had elected officials with spines and not worried about their re-election, we would have one tax everyone paid without exceptions. Unfortunately special interests of all stripes sway political decisions and we have the tax mess.

[gkacena]

09:09 AM on 08/18/2011

I am so tired of hearing about boycotts. I am concerned that all of the details as to why a boycott are called for are not always made known, and that is why I am not quick to boycott. If Amazon doesn't have a physical presence in California as someone else as said in their comments, then why should they be taxed by that state. I am waiting for California and my state (Illinois) to start taxing emails, for states and municipalities (not to mention the Federal government) still don't know how to leave within their/our means. More taxes are not an answer. Spending cuts are.

[steve0kelly]

08:13 AM on 08/18/2011

I shop at Amazon and will not Boycott them. I get good service and great pricing...I still support my "brick and morter" stores...not the state of RI where I live, who tax everything and return nothing to the taxpayer...simular to our present federal administration.
Internet shopping is here to stay....

[leanderm]

08:03 AM on 08/18/2011

Go Amazon. no obama 2012

[Aaron Calhoun]

06:58 PM on 08/27/2011

No Amazon. No Obama 2012! Vote progressive independent!